Southwest Airlines plans to purchase 10 new Boeing jet aircraft to replace the same number of older aircraft it currently operates. The new aircraft will not fly any more passengers than the aircraft they replace, so there will be no change in sales revenue. However, the new aircraft are more fuel efficient and will provide significant savings in fuel costs for Southwest. The aircraft being replaced will have a salvage value. To determine whether to proceed, Southwest should compute the net present value (NPV) and internal rate of return (IRR) based on project free cash flows for this investment opportunity (True or False?).

Group of answer choices

True

False

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